(a)
(i) Define the term “sovereign wealth fund” mentioned in the text (paragraph 2).
[2 marks]

(ii) Define the term “transfer payments” mentioned in the text (paragraph 3).
[2 marks]

(b)
(i) Using information from Table 1, calculate the change (in KD billion) in Kuwait’s nominal GDP from 2019 to 2022.
[2 marks]

(ii) Sketch an aggregate demand and aggregate supply (AD/AS) diagram to show how increases in oil revenue, as reflected in nominal GDP data in Table 1, might affect the inflation rate.
[3 marks]

(c)
Using a demand and supply diagram for the Kuwaiti dinar, explain how rising foreign direct investment (FDI) inflows (paragraph 5) might affect the exchange rate of Kuwait’s currency.
[4 marks]

(d)
Using a tariff diagram, explain how reducing tariffs on select imports (paragraph 5) could affect domestic firms that produce similar goods.
[4 marks]

(e)
Using a business cycle diagram, explain how fluctuating oil prices could lead to changes in unemployment in Kuwait (paragraph 2).
[4 marks]

(f)
Using a poverty cycle diagram, explain how limited skill development among low-income or vulnerable groups can perpetuate poverty (paragraph 3).
[4 marks]

(g)
Using information from the text/data and your knowledge of economics, evaluate the effectiveness of Kuwait’s diversification strategy in promoting economic growth and development.
[15 marks]

(h)
Using information from the text/data and your knowledge of economics, evaluate the effectiveness of Kuwait’s diversification strategy in promoting economic growth and development.